U.S. Residential Purchases by International Buyers: June 2010

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U.S. Residential Purchases by International Buyers: June 2010

  1. 1. U.S. Residential Purchases by International Buyers y June 2010
  2. 2. Total U.S. Residential Transactions Were $907 Billion, Twelve  Months Ending in First Quarter 2010.  Months Ending in First Quarter 2010. International Purchases Were 4 Percent. U.S. Residential Market:  $907 Billion Foreign Purchasers 4.45% Domestic Purchasers 95.44%
  3. 3. Twenty Eight Percent of Realtors® Reported Having at Least  One International Client in 2010.   Eighteen Percent with Transaction Completed. Realtors:  Foreign Client Percentages 35% 32% 30% 28% 26% 25% 23% 20% 18% 18% 15% 13% 12% 10% 5% 0% 2007 2008 2009 2010 Realtors who had international clients Realtors who had international clients Realtors who sold homes to international clients Realtors who sold homes to international clients
  4. 4. Previous Clients and Friends Provided 53 Percent of the  Initial Contacts for Realtors® Serving the International  g Market. Initial Client Contact Domestic source International source 13% 3% Web 13% Previous contacts/ Previous contacts/  clients Other Walk in Office/ Open  34% 31% house 9% Ad/ Yard signs Ad/ Yard signs 8% Friends All Others 19% 1%
  5. 5. International Market Appears to be Relatively Concentrated:  the  Number of Realtors® with a Large Number of International Clients is  g Limited. Realtors With International Clients                   ‐‐Number of Clients 11 or more 11 or more 6 to 10 4% 6% 5 7% 1 29% 4 9% 3 17% 2 28%
  6. 6. Two Percent of Realtors® Obtaining 75 to 100 Percent of their  Transactions from International Clients.  Three Percent Obtaining 51‐ g 75 Percent.  Percentage of Transactions by Realtors with International Clients 50% 45% 43% 40% 35% 30% 25% 24% 20% 15% 11% 10% 6% 6% 5% 5% 3% 2% 0% 0% (None) 0% (N ) 1% to 5% 1% 5% 6% to 10% 6% 10% 11% to 15% 11% 15% 16% to 25% 16% 25% 26% to 50% 26% 50% 51% to 75% 51% 75% 76% to 100% 76% 100%
  7. 7. Five Percent of Realtors® had Six or More Clients. Percent of Realtors by Number of Clients Purchasing Property 11 or more 6 to 10 2% 3% Zero Z 2 to 5 34% 30% 1 only 31%
  8. 8. The International Client:  Type A, Type B, and Both Served by  Realtors®. R lt ® International Client Types Served by Realtors 21% 41% 38% Type A: Primary residing in another country Type B: Recent immigrants and short term visa holders Both
  9. 9. Why Clients Do Not Purchase. Thirty Four Percent Had Financing Problems. Why Clients Did Not Purchase—in Addition to the 34 percent Encountering Financing Problems Not find a property 35% Cost of property 19% Immigration laws  13% Exposure to U.S. tax laws 9% Property taxes 7% Loss of home country benefits 4% Insurance costs Insurance costs 3% Other 18% 0% 5% 10% 15% 20% 25% 30% 35% 40%
  10. 10. International Purchasers:  Diversity of Areas and  Countries. C ti Purchases by Client Regions or Origin Oceania 1% Africa 4% Asia 28% North America 35% Latin  America 6% Europe 26%
  11. 11. International Purchasers:  Diversity of Areas and  Countries. C ti Purchases by Client Nationality‐‐2010 25% 23% 20% 15% 10% 10% 9% 8% 7% 5% % 5% 3% 2% 0% Canada C d Mexico M i United Kingdom China/Hong Kong G U i d Ki d Chi /H K Germany/France /F India I di Russia R i Argentina/Brazil A i /B il
  12. 12. Canada‐‐Largest Buyer Group in the Past Three Years.  Share of  Mexican Buyers is Growing.  Share of U.K. buyers has been  y g y Decreasing. International Purchasers:  Country of Origin 30% 25% 20% 15% 2007 2008 10% 2009 5% 2010 0%
  13. 13. International Purchases Pricing. International Purchases—Pricing. Purchase by Price Range Over $1 Million 7% $750 K to $1 Million $750 K to $1 Million 3% $500 K to $750 K 6% $400 K to $500 K 9% $300 K to $400 K 11% $250 K to $300 K 8% $200 K to $250 K 10% $150 K to $200 K 11% $100 K to $150 K 17% $100 K or less 18% 0% 2%
  14. 14. Pricing Over Time. Pricing Over Time. Percent of International Sales by Price 50% 45% 40% 35% 30% 2007 25% 2008 20% 2009 15% 2010 10% 5% 0% Under $200K $200K to $500K $500K to $1 Million Over $1 Million
  15. 15. Types of Properties Purchased. Types of Properties Purchased. Type of Property Purchased Commercial Property 3% Condo/   Apartment 23% Detached single‐ family 66% Townhouse/ row  house 8%
  16. 16. Mortgages International Purchasers Frequently Pay Cash. Property Payment Don't know 1% With mortgage  financing 44% All cash (no mortgage  financing) 55%
  17. 17. International Buyers are Split Between Use of the  Property as a Vacation Home/Investment Home and  p y / as a Primary Residence. Intended Use Vacation home for  family and friends 22% Primary residence Pi id 50% Residential rental  property for  property for Both of the  investment above 14% 14%
  18. 18. Price Analysis Price Analysis Price distribution by residence purpose Over $750 K 11% 8% $500 K to $750 K 6% 6% $300 K to $500 K 14% 25% $250 K to $300 K 6% 9% $200 K to $250 K $200 K to $250 K 11% 11% $150 K to $200 K 9% 14% $100 K to $150 K 20% 14% $100 K or less 23% 14% 0% 5% 10% 15% 20% 25% 30% Non‐primary residence    Median: $186,100 Primary residence             Median:$240,000 Primary residence Median:$240,000
  19. 19. International Buyers Purchase Property in a  Variety of Types of Areas. Variety of Types of Areas Location Characteristics Resort area 14% Central city/ urban  Small town/ rural  area area 27% 9% Suburban area 50%
  20. 20. Transactions by State. Transactions by State. Percent of Transactions by State 30% 25% 20% 2007 15% 2008 2009 2010 10% 5% 0% Florida Fl id California C lif i Arizona Ai Texas T Georgia G i New York N Y k Nevada N d
  21. 21. Realtors® Have Been Reporting Modest Increases in  International Clients. I t ti l Cli t How Has Percent of International Clients Changed? 70% 60% 50% 40% 30% 20% 10% 0% Increased Stayed about the same Decreased Not applicable Last Year Last 5 Years
  22. 22. The Value of the Dollar Appears to Impact  International Sales. I i lS l Effect of Change in Value of Dollar on International Sales Not much 21% Very significant 38% Moderate 41%
  23. 23. The Value of the Dollar Appears to Impact  International Sales. I t ti lS l U.S. ed a o e ce: o a s a d u os U.S. Median Home Price:  Dollars and Euros 250 200 Price in $ ce in 1,000 150 100 Pric Price in € 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1,000 Euros 155.1 171.5 174.9 157.3 156.3 175.7 177.5 159.9 132.7 122.5 140.7 1,000 Dollars 143.6 153.1 165.0 178.8 195.4 219.6 221.9 219.0 198.1 172.5 173.1 1 000 Dollars 143 6 153 1 165 0 178 8 195 4 219 6 221 9 219 0 198 1 172 5 173 1
  24. 24. Security and Profitability:  Prominently Mentioned as  Reasons for Purchasing.  Reasons for Purchasing Most Important Issue for Clients Other 8% A secure investment. 18% Desirable location. Profitable  45% investment. 29%

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